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Alex
4 years ago
6

Machinery was purchased on January 1 for $51,000. The machinery has an estimated life of 7 years and an estimated salvage value

of $9,000. Double-declining-balance depreciation for the second year would be (round calculations to the nearest dollar):A. $10,929B. $10,408C. $10,500D. $6,000
Business
1 answer:
Anit [1.1K]4 years ago
4 0

Answer:

Option (B) is correct.

Explanation:

Given that,

Purchasing cost = $51,000

Estimated life of machinery = 7 years

Estimated salvage value = $9,000

Depreciation rate under Double declining balance method:

=  (1 ÷ Useful life) × 200%

= (1 ÷ 7) × 200%

= 28.57%

First year depreciation = Purchasing cost × Depreciation rate

                                      = $51,000 × 28.57%

                                      = $14,571

Second Year depreciation:

= (Purchasing cost - First year depreciation) × Depreciation rate

= ($51,000 - $14,571) × 28.57%

= $10,408

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